The development of general personal jurisdiction is quite interesting. The cases we will examine below will outline the basic rule for general personal jurisdiction within the United States. We will begin by examining Daimler, which has the current rule, and Goodyear which is how the current rule was first introduced.
Daimler AG v. Bauman
571 U.S. 117 (2014).
Bauman and several other Argentineans are plaintiffs while Daimler is the defendant. Daimler motioned for the case to be dismissed which was granted in the trial court. Upheld but later reversed at the Circuit court. Consequently, Daimler appealed.
Question
Global Issue: Whether it is a violation of Due Process to find general personal jurisdiction for claims involving “only foreign plaintiffs and conduct occurring entirely abroad.”
Narrow Issue: “Whether Daimler’s affiliations with California are sufficient to subject it to the general (all-purpose) personal jurisdiction of that State’s courts.”
Rule
A defendant must be “at home” in the state to find general personal jurisdiction. At home is the domicile of the defendant. For corporations, that is the primary place of business or the place of incorporation.
Holding
Although MBUSA can be seen as a close affiliate with locations in California, that does not make Daimler AG subject to general personal jurisdiction. Reversed.
Facts
Several individuals from Argentina filed suit in California to try the actions of Daimler during the “dirty war.”
So,
- Plaintiffs are from Argentina
- Defendant is from Germany
- Defendant has a relationship with MBUSA in the United States
- MBUSA is incorporated in Delaware and has a primary place of business at New Jersey
- MBUSA has several offices including ones in California
The plaintiffs want to use MBUSA as a channel to show that the defendant can be found to have general personal jurisdiction.
Analysis
The original rule for general personal jurisdiction is that if there was a “continuous and systematic” contact with a state then general personal jurisdiction could be found. However, Goodyear expounded on this by saying that those “continuous and systematic” contacts need to be so strong as to render the defendant “at-home” in the forum state.
Over time though, this phrase “at-home” needs to be defined. For, if we continue to use the continuous and systematic test, one could easily find a steady stream of contacts and many companies could be subject to general personal jurisdiction where those cases should be reserved for specific personal jurisdiction. Thus, “at home” means that one can find general personal jurisdiction is the percentage of the sales and employees relative to the percentage throughout the rest of the world. This is to be used in addition to “the principle place of business or the place of incorporation” for a corporation.
Here, for the sake of argument, the court assumed that MBUSA’s “at-home” in California. They still would not find sufficient grounds for general personal jurisdiction because the contacts of Daimler in California were too slim compared to the amount of sales done world-wide.
Takeaway
We no longer use the “continuous and systematic approach” (i.e. suing McDonalds wherever they have a large franchise connection). Instead, we use the “at-home approach” (i.e. suing McDonalds at the state where they have their headquarters or where they are incorporated). “At-home” is a much narrower approach as you can tell from the McDonalds example above.
Additional Notes
The whole point of taking this case was to define “at-home”. SCOTUS wanted to show that even though California had the greatest sales then anywhere else, it is not enough to say that the corporation is “at-home” in that jurisdiction.
So, this principal works when there is a massive percentage of work occurring in one place. For example, if a farmer is incorporated in one state, manages offices from another, but farms completely in a third, that third state could be seen as “at-home”.
In other words, to determine if one is at home in the forum state, we look at the percentage of sales and employees in that forum state compared to the percentage with the rest of the world. Although we don’t know the cutoff point, for our purpose, we will just assume that number is 90%.
To summarize
- A company will always be subject to general personal jurisdiction at their principle place of business.
- Additionally, a company will always be subject to general personal jurisdiction at their state of incorporation.
- But a company can also be subject to general personal jurisdiction at the state where they are “at-home” which is measured against their world-wide sales. This is going to be used in very unusual and extreme situations.
Goodyear v. Brown
131 S. Ct. 2856 (2011).
European subsidiaries of Goodyear USA (and Goodyear USA itself) are defendants. Brown is the plaintiff. Plaintiff lost in trial and appellate courts and defendants appealed.
Question
“Are foreign subsidiaries of a United States parent corporation amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum State?”
In other words, can the European subsidiaries of Goodyear USA be subject to suit in North Carolina even though they don’t sell any goods in North Carolina?
Rule
There must be a continuous and systematic affiliation with the forum state to find general personal jurisdiction.
Holding
There is no general personal jurisdiction in this case. Reversed.
Facts
Plaintiff is the estate for two children who were involved in a fatal bus accident on a soccer trip in France. It was determined that the cause of the accident were the tires on the bus. Goodyear had provided those tires. Thus, the plaintiffs filed suit, using North Carolina as the forum state.
- Goodyear USA has a manufacturing plant in North Carolina and did not contest being subject to general personal jurisdiction.
- The European Goodyear subsidiaries did object and filed motions to dismiss because lack of personal jurisdiction.
Analysis
Here, the courts are getting specific and general personal jurisdiction confused. The trial and appellate court had used a specific “stream of commerce” approach to say that there was personal jurisdiction. However, because the claim did not arise out of the defendant’s conduct with North Carolina, there is no specific personal jurisdiction.
The court then turns to describe how general personal jurisdiction functions. There must be a continuous and systematic affiliation with the forum state. Goodyear USA had established this with the manufacturing plant in North Carolina. However, the European subsidiaries did not not have general personal jurisdiction because they had minimal to no substantial affiliation with the forum state (their tires occasionally showing up there).
Additional Notes
Any claims of specific personal jurisdiction would have needed to be made in France, not North Carolina. The plaintiffs would not want to sue in France because there is not a tort system that compensates the family for the tragic accident.
Goodyear has a massive presence in all 50 states, including North Carolina. But this was not enough to establish general personal jurisdiction. Why? This is because all the tires were manufactured, driven, etc. in France (not North Carolina).
The key point of this case is that there are subsidiaries. Goodyear USA is the parent company while the other defendants are only subsidiaries. Even though they report up to Goodyear USA, they are considered separate entities.
So, how do we determine if someone is at home? By seeing if their presence is primarily conducted in one state over another.
Additional Notes
General personal jurisdiction is based solely on domicile. This is different from Specific because specific focuses on contacts.
Domicile is different than resident. There is a difference between “residence” and “citizenship”. Domicile is about citizenship. So, how do you determine someone’s citizenship for domicile purposes?
- Physical presence
- Intent to remain indefinitely
How do we determine the intent to remain indefinitely? By seeing if there are subjective manifestations of objective intent.
For the purposes of domicile, there is a difference between human beings and corporations. Human beings can have domicile in only one location. Corporations, though, can follow two tracks, one for subject matter jurisdiction and personal jurisdiction. Consequently, they can have domicile in two places:
- Principle place of business
- State of Incorporation
- At home
As shown above, we can also find a company can have general personal jurisdiction in a third place “at-home”. However, this is unusual. Although it happens, this term is not used often. Goodyear introduces this principle.
Perkins v. Benguet Consolidated Mining Co. – WWII
The Philippines have a lot of mining. Benguet was a Philippine mining company who fled to the United States during WWII. However, there was an ongoing dispute with Perkins and the question was, can this case be heard in an American court? Not with specific, but what about general? Prior to this case, the only place where one could find general jurisdiction was through state of incorporation. However, this case said that a personal place of business can be used (even if temporary) to find general jurisdiction.
Takeaway: Principle Place of Business
Helicópteros Nacionales de Columbia, S.A. v. Hall – Helicopter crash
This case arose when a company based in Columbia was sued in Texas. The attorneys argued that there was general personal jurisdiction in Texas because the company had sent executives to Texas to deal with some contracts or helicopter purchases. The big takeaway from this case is that contacts does not assert general jurisdiction.
Takeaway: Assert the accurate type of personal jurisdiction.
Next week we will finish up General and finish Tag might make it to Mullane, but read everything else before.
Disclaimer
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.
